Hi wise ones,
I purchased an IP at the beginning of last year. Purchase cost was $220,000. I also borrowed $20,000 to renovate which I spent on renos before searching for a tenant.
I'm a little confused about what this means at tax time...
1. Can I claim the interest on the $20,000 loan as a deductible expense? (I think not??)
2. Can the renovation costs be claimed, and if so at what rate? (I know it's not as a straight out loss.)
3. I have had a depreciation schedule done after the reno so does that mean that point number 2 is irrelevant??
I vaguely remember that its something to do with capital costs??? and just want to sort things properly before sending it all to the accountant
Excuse my ignorance on this one, and thanks in advance.
Allgood.
I purchased an IP at the beginning of last year. Purchase cost was $220,000. I also borrowed $20,000 to renovate which I spent on renos before searching for a tenant.
I'm a little confused about what this means at tax time...
1. Can I claim the interest on the $20,000 loan as a deductible expense? (I think not??)
2. Can the renovation costs be claimed, and if so at what rate? (I know it's not as a straight out loss.)
3. I have had a depreciation schedule done after the reno so does that mean that point number 2 is irrelevant??
I vaguely remember that its something to do with capital costs??? and just want to sort things properly before sending it all to the accountant
Excuse my ignorance on this one, and thanks in advance.
Allgood.